1. If the margin is greater than the average, what can we say about average and margin?
a. average is at its max
b. average is at its min
c. average is rising
d. average is falling
e. margin is at its max
f. margin is at its min
g. margin is rising
h. margin is falling
2. Diminishing marginal returns to labor
a. will happen immediately at 1st worker
b. occur only in the long run
c. are a result of variable capital inputs
d. are the cause of decreasing returns to scale
e. all of the above
f. none of the above
3. What is the general relationship between AVC, ATC, and MC?
a. All Valley shaped, but don't intersect
b. All Hill-shaped but don't intersect
c. Valley-shaped, and ATC=AVC at most input levels
d. Valley-shaped and MC intersects each of the average functions at their minimum
e. Valley shaped and there's a single intersection point where MC=AVC=ATC.
f. Valley-shaped and ATC < AVC forest levels of output
g. Answers E and F are both correct